On a new project, a project manager wants to estimate the overall cost but does not want to spend much time on detailed analysis. She only needs a quick ballpark figure to support an early go or no go decision and detailed planning will come later. In this situation, which approach to project cost estimating is the most appropriate?

Introduction / Context:
Early in a project life cycle, senior management often needs a fast and approximate estimate to decide whether to continue, cancel or postpone a proposed initiative. At this stage, detailed scope breakdowns and accurate data usually do not exist. The Project Management Body of Knowledge therefore recognises high level estimating techniques such as analogous estimating and rough order of magnitude estimates that can produce a ballpark figure quickly. This question checks whether you can select the technique that best fits a situation where speed and low effort are more important than accuracy.

Given Data / Assumptions:
- The project manager wants a cost estimate for a project that is still in an early stage.
- She explicitly wants a ballpark figure rather than a highly accurate number.
- She does not want to spend much time on detailed analysis or full decomposition of the work.
- It is reasonable to assume that historical cost data from similar projects exists in the organisation.

Concept / Approach:
Analogous estimating uses the actual cost of previous, similar projects as the basis for estimating the cost of a current project. Because it relies on high level comparisons, it is faster and cheaper than detailed bottom up estimating. Accuracy is lower, but usually acceptable for feasibility studies and rough order of magnitude decisions. In contrast, bottom up estimating requires a complete work breakdown structure and activity level estimates, which is too heavy for a quick ballpark figure. Quantitative risk analysis is also too advanced and time consuming for this early estimating need.

Step-by-Step Solution:
Step 1: Identify the key requirement that the estimate must be quick and at ballpark level. Step 2: Recall that detailed bottom up estimates need much more time and information than is available here. Step 3: Remember that analogous estimating reuses actual costs from similar completed projects and is suitable when little detail exists. Step 4: Compare the answer options, and note that only using the cost of similar projects directly describes analogous estimating. Step 5: Select the option that refers to using similar completed projects as the most appropriate technique.
Verification / Alternative check:
You can double check by linking the scenario to the concept of rough order of magnitude estimates, which often range from minus twenty five percent to plus seventy five percent in accuracy. These are usually produced by analogous or parametric methods before detailed design. Since no unit based parameters are mentioned, the best match is analogous estimating that uses whole project cost as the reference.

Why Other Options Are Wrong:
Bottom up estimating is wrong because it contradicts the wish to avoid detailed analysis. Refusing to estimate until complete data is available is not realistic, since managers often must make decisions with limited information. Creating a precise cost baseline with detailed reserves assumes that detailed planning is already done. Performing complex quantitative risk analysis is inappropriate at this early point and requires significant effort and data.

Common Pitfalls:
A frequent mistake is to believe that accurate estimates are always required, ignoring the idea that estimate accuracy evolves over time. Another pitfall is to confuse analogous and parametric estimating. Parametric methods use unit rates, which are not present in the scenario. Candidates may also be tempted by options that sound more sophisticated, such as quantitative analysis, but high sophistication is not always aligned with the needs of early decision making.

Final Answer:
The most appropriate approach for a quick ballpark cost figure in this situation is to use the cost of similar completed projects to create an analogous cost estimate.